Mattel reports surprise growth in North America sales and shares jump

Mattel Inc reported a surprise rise in North American sales, allaying concerns about the effects of retailer Toys ‘R’ Us’ liquidation on the toy industry and driving its shares up 8 per cent.
Photo: File (AP Photo/Richard Drew, File)

INTERNATIONAL - Mattel Inc reported a surprise rise in North American sales, allaying concerns about the effects of retailer Toys ‘R’ Us’ liquidation on the toy industry and driving its shares up 8 percent on Thursday.

Mattel credited the improving trend to stronger demand for Barbie, the iconic brand of dolls that has undergone a revamp in recent years.

The El Segundo, California-based toymaker has made several tweaks to Barbies, by adding a variety of skin tones, plus-sized and hijab-wearing models and science kits to make the products more educational.

Gross sales from North America rose 5.6 percent in the three months ended September, Mattel said, marking the first increase in at least six quarters. Four analysts polled Refinitiv had on average estimated a near 13 percent drop in sales.

The upbeat North American sales contrast with results from Mattel rival Hasbro Inc, which said this week the Toys ‘R’ Us bankruptcy was still having a lingering impact on its U.S. and Canadian businesses.

Mattel’s overall net sales, however, missed Wall Street estimates as its international business was hit by lower demand in China and Europe.

Lower sales of Fisher-Price and Thomas & Friends products resulted in an 18 percent decline in international sales in the third quarter.

Mattel mis-forecast demand in China relative to supply and is taking action to better manage inventories at retailers, Chief Executive Officer Ynon Kreiz said in an interview.

Mattel on Thursday also said it would consider strategic alternatives for its manufacturing facilities.